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How could VA hospital fiasco happen?

By The Denver Post Editorial Board

Posted:
04/26/2014 05:01:00 PM MDT

Updated:
09/18/2014 05:49:53 PM MDT

U.S. Rep. Mike Coffman, left, listens to witness testimony at the state Capitol in Denver on the cost overruns and delays with the construction and completion of the Veterans Affairs hospital in Aurora. (Kathryn Scott Osler, The Denver Post) (Kathryn Scott Osler, Denver Post file photo)

The more we hear about the enormous cost overruns projected for the Veterans Affairs hospital being built in Aurora, the more incredulous we are that it could get this far.

Though a contract appeals board ultimately will decide whether to accept the version of events presented by the VA or its contractor, there are steps that could be taken now to reduce the damage.

First, the $1 billion project clearly ought to be scaled back to reduce costs. Had the design been adjusted earlier on, the savings could have been significant. There was a chance the hospital could have been built for the $604 million budgeted.

However, the skeleton of the expansive medical center has been erected, and the potential for cost-cutting is diminished. That doesn't mean the VA should abandon all effort at economy.

Second, the VA should find the money to keep the contractor, a Kiewit-Turner joint venture, from digging into its own pockets to keep the work going. By Jan. 2015, the contractor is expected to expend $96 million more than the VA will have paid in order to continue construction.

Republican Rep. Mike Coffman blames the VA for the fiasco and is pushing legislation to reform its management while placing its larger projects under the oversight of U.S. Army Corps of Engineers special project managers. It's a good idea — especially since the Government Accountability Office has identified three other VA facilities with similar cost-overrun issues — but this particular hospital needs flexibility from the VA now.

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Democratic Sen. Michael Bennet informed the VA's inspector general last week of a "growing number" of complaints he'd received from companies burdened by the VA's plodding schedule for approving payments and change orders. He's asking for a thorough review of construction delays and cost overruns.

The crux of the dispute between the VA and its contractor centers on design, and whether they ever had an agreement that could be executed on the government's budget.

The VA says there was one, while the contractor contends its people sounded warning bells all along, insisting that the evolving design was too posh for the budget.

Kiewit-Turner points not only to its own warnings but the assessment of an outside engineering firm that priced the design as over budget. And yet the VA trudged on, apparently content to leave the contractor on the hook for hundreds of millions of dollars.

If true, it's a tale of stunning incompetence — with veterans and taxpayers as the victims.

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